Spotify chief hits back over piracy and lays down Apple challenge

The managing director of the Australian arm of music streaming giant Spotify has hit back at claims that streaming services have done nothing to alleviate piracy among internet users, and warned Apple it faces a fight to knock it off its perch in streaming.

Kate Vale, who runs the Australian and New Zealand operations of Spotify was responding to a critical opinion piece in The Australian Financial Review by Andrew Harris of music rights body APRA AMCOS, which accused fans of TV shows such as Game of Thrones of using the lack of easy, cheap online viewing options as an excuse for piracy.

He said evidence from the music industry had shown piracy levels remained as high when cheap, industry approved options become available.

Ms Vale said Spotify is working on a project to demonstrate its impact on piracy during its two years in n Australia, but said anecdotal evidence was contrary to Mr Harris’s claims.

She said the emergence of streaming services, and particularly Spotify’s ­ad-supported free option, was bringing lost money back into the local and ­global music industry.

“We do believe that access, availability and price does contribute and is the answer and we have proven this in other markets across Europe and particularly in Sweden where we have seen a 30 per cent reduction in piracy since we launched about six years ago.

“If you look at the main audience that is on Spotify, a lot of them are former pirates. There are teenagers who have potentially never paid for their music before, and probably never will.

“If we can get them on to a service that is free but legal, and they are contributing through our advertising on that free tier, then it is giving money back into the industry that they are just never going to get before.”

Ms Vale said, across the world the average conversion rate from free ­listeners to paid subscribers was 25 per cent, but Australia sat above that at 31 per cent.

Spotify has 40 million users across 56 global markets, with 10 million paid subscribers.

It has been seen by many as a saving grace for an industry battling revenue loss to piracy, but has also been criticised for leaving artists with surprisingly little pay for the number of streams of their songs.

The company put out an explanation for its payment policy last year, which it said showed that the more people who sign up for Spotify, the better paid ­artists will be.

British group Coldplay scored the fastest-selling album of the year in the UK earlier this month, by signing an exclusive digital deal with Apple’s iTunes, meaning its album cannot be streamed on Spotify for the moment.

The move is being seen as particularly worrying for Spotify in an increasingly competitive market, with Apple rumoured to be planning a music streaming service after buying rival streaming company Beats Music.

Nielsen figures showed Spotify was dominant in Australia with 71 per cent of the market, and was confident it could take on any challenge from Apple, Ms Vale said.